Income: If you invested in shares, this would be any dividends you receive.

Capital: If you invested in shares, this would be the growth in a company’s share price from when you bought it. You only realise this capital gain when you sell the asset.

It makes investment sense to add income and capital returns together. Convert this to an annual rate.

If you’re looking at an overseas investment, have a look at its performance over the last few years. You want to see the prospect of decent returns before investing, otherwise it’s not worth taking on the extra risk.